Your Generation Z child may be eager to move out, but don’t expect them to be in a rush to leave your financial support.
A recent survey by Bank of America revealed that almost half of adults aged 18 to 27 still rely on financial assistance from their parents and family members.
The survey from the financial institution indicated that 46% of those born between 1997 and 2012 require this extra support, with 52% stating that their income is insufficient to support the lifestyle they desire, largely due to the high cost of living.
As a result, 54% of them struggle to afford housing. Among those who do pay for their own housing, 64% spend over a third of their monthly income on rent or a mortgage, and 20% allocate more than half of their monthly earnings to this expense.
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To improve their financial situation, 67% of respondents in the survey reported changing their habits: 43% reduced dining out, 27% skipped social events, and 24% switched to more affordable grocery options.
Despite their efforts to work towards financial goals, the survey shows that within the next five years, 50% won’t be ready to buy a home, 46% won’t be saving for retirement, and 40% won’t start investing.
“While facing challenges due to the cost of living, younger Americans are displaying discipline and foresight in their saving and spending behaviors,” said Holly O’Neill, president of retail banking at Bank of America. “It is crucial that we continue to empower Gen Z to strive for financial well-being and achieve their long-term aspirations.”
Some reports, such as one from Bankrate, suggest that younger Americans, including Gen Z and millennials, find it more challenging to accumulate wealth compared to previous generations.
However, other studies indicate that Gen Z is actually wealthier at their age than previous generations. This is partly attributed to their desire for higher salaries and differing definitions of a middle-class lifestyle. Yet, their net worth remains the lowest among all generations due to their age and the increasing cost of living.
